Budget 2020: An Ambitious Plan To Accelerate SVG's Economy

Budget 2020 represents an ambitious attempt to accelerate the economic transformation of Saint Vincent and the Grenadines. At $1.2 billion, it is the largest budget ever tabled in Parliament.

Building on the foundations of the Governments’ work over the past two decades, Budget 2020 hastens the transition from colonial-era economic underpinnings towards a modern, competitive, post-colonial economy. Significant investments in ICT, tourism, infrastructure, renewable energy and entrepreneurship further this objective.

Nowhere is the process of transformation more apparent than in agriculture. Long removed from the late-1990s dominance of banana exports, the Vincentian agricultural sector is now increasingly diversified around banana and plantain production. Root crops, fruit and vegetables, livestock, poultry, cocoa and coffee are now all major employers and economic contributors. The medicinal cannabis industry, legally-established in 2019, signals greater diversification in the sector. Additionally, the policy of engaging the private sector to expand fisheries production has hooked major investors, including a new exporter that will begin operations in 2020.

The Government is investing heavily in tourism, with capital expenditure on new hotels, tourism facilities and capital improvements. Many private sector entities are also investing in the hospitality sector. Given the rapid growth in arrivals by cruise ships, Budget 2020 offers special incentives to investors interested in purchasing tour boats and buses.

Budget 2020 continues to emphasise climate change adaptation, disaster preparedness and sound environmental practice. In addition to the continued capitalisation of the Contingencies Fund – now in excess of $31 million – a full 34% of capital expenditure is connected to climate change, renewable energy or disaster response.

In its focussed efforts to stimulate job creation and decent work, Budget 2020 creates new public service posts and spends directly on a series of major capital projects. Budget 2020 anticipates employment growth in the construction, hospitality, manufacturing, agriculture and fisheries sectors. Budget 2020 makes provision for a 2% salary enhancement for, public servants, bringing to 4.5% the total increases since 2018. A 25% wage hike for certain low-paid part time workers will also improve workers’ overall compensation.

The 25% wage increase for low-paid workers is part of a multifaceted plan in furtherance of the Government’s continued efforts to reduce poverty, vulnerability and inequality. Budget 2020 strengthens the social safety net while investing in geriatric care, reduced undernourishment, and the protection of citizens from weather events and climate change.

The government’s signature focus on education is continued in 2020, with a special emphasis on school reconstruction and the provision of improved opportunities to access technical and vocational training. More students than ever before are accessing tertiary education and internships through state supported loans, scholarships and stipends.

The $311 million capital budget is the largest such estimate tabled at the start of any year in Saint Vincent and the Grenadines. In addition to hotel construction, the capital budget is driven by school repair and construction, the modern cargo port, the Regional Disaster Vulnerability Reduction Project, investments in geothermal energy, road repair and the rollout of the Pedestrian Access for Village Enhancement (PAVE) programme. Investments in sporting facilities, including a new athletic track and football field, also add to the capital budget.

The Government plans to meet the ambitious implementation targets of Budget 2020 through critical human resource enhancements, modified financing arrangements, and having an early start on the 2020 capital programme. The Government expects significant improvements on 2019’s record capital expenditures.

A number of legislative and policy initiatives help to enhance fiscal prudence, good governance and climate resilience. These measures include a Fiscal Responsibility Framework, laws related to tax administration, regulations governing the work of state-owned enterprises, supervision of the Contingencies Fund, and new planning procedures.

Amid a period of global economic uncertainty, the International Monetary Fund and the United Nations Economic Commission for Latin America and the Caribbean predict that Saint Vincent and the Grenadines’ economic growth will be around 2.3 – 2.4% Given the massive private investments scheduled to take commence in 2020, as well as the Government’s own ambitious programs, there are considerable possibilities for additional growth. However, exogenous circumstances – from the ever-present threat of natural disaster to the global uncertainties in advanced economies – could negatively affect growth prospects.

Budget 2020 is ambitious, but attainable. It places its confidence in the people of Saint Vincent and the Grenadines, and sets forth a developmental vision that is sustainable, progressive, and people-centred. Saint Vincent and the Grenadines is well-positioned to accelerate its economic transformation.

By News784

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